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Two judgments of the Paris Civil Court of First Instance establish that Dailymotion is a hosting service provider

In the last edition of the newsletter we considered the recent developments in the law relating to providers of hosting services. In this article we consider two further cases, which provide useful guidance as to whether a User Generated Content platform is a hosting service provider as opposed to a publisher of information.

On 15 April 2008, the Paris Civil Court of First Instance ruled, in two judgments, that Dailymotion is a hosting services provider. These two decisions add to the number of cases relating to the liability of hosting services providers that have recently been considered. Both judgments provide useful guidance as to the criteria used by the French courts to decide whether a User Generated Content platform is a host and when liability may be incurred.

French humorists (Lafesse in the first case, and Omar and Fred in the second case) sued Dailymotion arguing that it had infringed their intellectual property rights. Some of their sketches were alleged to be available on the platform operated by Dailymotion. In both cases, the Paris Court ruled that Dailymotion was a hosting services provider. However Dailymotion was only liable in respect of the claim brought by Lafesse.

1. Dailymotion is a hosting services provider

Both claimants sought to argue that Dailymotion was a publisher of the information. The claimants relied on the fact that Dailymotion:

selected the file size and modified the content by re-encoding the information;

made editorial choices by imposing a particular architecture on the site; and

received advertising revenues as a result of adverts published on the website.

The Court stated that a publisher was "the person who determines the contents made available to the public on the service created or managed by this person". It then considered whether Dailymotion was a publisher within this definition.

The Court ruled that re-encoding the files and limiting their size were purely technical tasks, establishing the technical limits faced by Dailymotion and users of the service. The Court's view was that choosing the structure of the files made available to the public does not make the website creator a publisher as long as he does not determine the contents of the files that are put online. The Court also stated that "it has not been shown that a user who would choose to classify his video in an unsuitable category would have his upload denied."

As regards advertising, the Court expressly stated that:

"the marketing of advertising spaces does not make it more likely that Dailymotion will be considered to be a content publisher, since nothing in the law precludes a hosting provider from profiting from its website by selling advertising spaces, as long as the partnerships to which it agrees do not determine the content of files posted by web users.

The LCEN (i.e. French "Law on Confidence in the Digital Economy") does not preclude hosts from making money by selling advertising spaces. Additionally the conditions to be met in order to qualify as a publisher were set out explicitly in the Act, namely that content is actually chosen by the company that created the website.

By denying hosts the opportunity to benefit from advertising, and by adding this criterion to the other criterion expressly prescribed by law, claimants twist the text of the LCEN. They state that a host should refuse advertising revenues, whereas in fact their status is defined in a law that deals with e-commerce."

The Court concluded that Dailymotion was not a publisher. The claimants had failed to show that the contents uploaded by web users were controlled by a drafting committee as would be appropriate for a publishing website.

2. Dailymotion's liability as a hosting provider

In both cases, the Paris Court set out again the legal regime applicable to hosting service providers. As a host, Dailymotion is not under any obligation to check or control the content of the videos before they are uploaded by web users. Dailymotion may only be liable in respect of contents that are obviously illegal i.e. related to paedophilia, crime against humanity and racial hatred. In any other cases, and significantly in infringement cases, hosting providers may only be liable if they have actual knowledge of the obviously illegal nature of the videos stored, or of facts pointing to such nature. The Court then stated that violations of authors' patrimonial and moral rights does not result in any prior knowledge and implies that victims of infringement must notify the hosting provider. They have to set out the rights that they consider to be infringed through the notification process described in Article 6-5 of the LCEN.

In the Omar and Fred case, the Court ruled in favour of the defendant. The Court's view was that Dailymotion could only withdraw content which had been precisely identified by the claimant from its website. These were in exhibits produced in support of Omar and Fred's writ of summons, at the time the writ had been delivered to Dailymotion. The Court nevertheless ordered Dailymotion, "if necessary", to stop by any means, within 48 hours from the judicial decision, any new broadcasting of the works contained in a DVD communicated by the claimants.

The Court only partially adopted the same reasoning in the Lafesse case, due to the fact that the circumstances were quite different. A judgment rendered by the Paris Court on 18 December 2007 actually dismissed Lafesse's claim on the basis that the infringing videos had not been sufficiently identified. As only issues ruled on the merits have the authority of a final decision, Lafesse's new claim for infringement was deemed admissible only if he could prove that he could bring an action. In the light of these particular circumstances, in the new case, Dailymotion was asserting that it had withdrawn the videos in question as a result of the new writ of summons (which amounted to a proper notification under Article 6-5 of the LCEN).

A DVD had been produced by the claimant in the context of the first proceedings. The Court considered that Dailymotion was not liable for infringement in respect of the sketches contained in the 10 other DVDs produced by the claimant in support of its new writ of summons. The Court nevertheless ordered Dailymotion to stop broadcasting the works on the 10 DVDs within 48 hours of the judicial decision.

Regarding the DVD that had been produced in the first proceedings between the parties, the Court adopted a very strict interpretation of the knowledge of the illicit nature of litigious contents that was required. The court stated that "faced with the likelihood of entitlement to rights potentially resulting from indications displayed on the broadcasting media of works produced, hosting providers must assess the illicit nature of the uploaded contents". According to the judges, despite the fact that the DVD produced was only a compilation, the communication of this media allowed Dailymotion to acquire the knowledge of the works contained in it. Dailymotion was therefore in a position to partially determine which works it should have withdrawn from its platform.

The Court therefore ruled that Dailymotion was liable in respect of the 20 works contained in this DVD. Dailymotion was order to pay € 5,000 to Lafesse in compensation for the damage to moral rights incurred.